Why The Democratic Deficit In The NSW Liberals Must Be Fixed

After resounding success at State level in 2011 – after years in opposition – it appears the NSW Liberal Party rank and file, and significant office holders, have serious questions over internal control and influential personalities holding sway over pre-selections and party positions. In the lead up to 2016 federal election, The Hon Angus Taylor MP, the Member for Hume and now Assistant Minister for Cities & Digital Transformation, faced a challenge for the seat of Hume. Angus Taylor prevailed but backroom machinations suggested that factional warlords were at work to give the seat to his rival. On Tuesday 6 September 2016, Angus Taylor addressed The Sydney Institute to outline the reasons reform of the NSW Division of the Liberal Party is long overdue.

WHY THE DEMOCRATIC DEFICIT IN THE NSW LIBERALS MUST BE FIXED

ANGUS TAYLOR

Tonight I call for revitalisation of the New South Wales Liberal Party. In this speech I seek to take a good honest look at the current state of our party in NSW and, by extension, the broader Liberal movement across the country.

We need to revitalise and democratise the party in NSW and we need to take meaningful steps in that direction very soon. Our electoral success depends on this.

What I am calling for tonight is not unique and has been well and truly on the agenda for some time – long before the 2014 Howard Report. That report, embarrassingly, has been collecting dust for over two years, and many other reports have been collecting dust for far longer. I am motivated to speak on this topic because the success of our great party in NSW is essential to our state. But also to the future prosperity of our wonderful nation.

This question of revitalisation and democratisation in NSW is a matter of broader public importance as it impacts upon the liberal and conservative movements around the country.  We need the Liberal Party to prevail in these times. This country cannot succumb to inward looking, populist, leftist, identity politics – which are currently getting a pretty good run here and around the world.

If we cannot stand for and prevail in our quest for economic and political freedoms and efficient but competent government – if the nation can’t stay grounded in these key values – then we may as well all pack up and go home.

Now, I have no intention of going anywhere because I believe that the Liberal Party’s best times are ahead of it – if we confront the challenges that we face. Of course, the NSW Division is the largest and is the most influential of all the Divisions of the party. It has been very successful in recent years, and we should celebrate that success.

But, like any successful organisation, we face challenges, and the truth is that if the NSW Liberal Division sneezes the Federal party catches cold. If we don’t face up to the serious challenges here, and quickly, then we risk electoral failure.

To be sure of winning elections in the future, we need a reinvigorated Division, with a motivated membership, with foot soldiers in our electorates talking us up every day and with more troops on the hustings than ever before.

Backstory

Before I talk more about what I have in mind, and why these changes are so important, I want to flag some personal context. My interest in reform of the NSW party is not recent. Well before I decided to run for pre-selection in Hume, I took the view that there were two ways for me to make a difference in politics.

I remember discussing this at length with my wife Louise, almost ten years ago. I said to her I could try to get into parliament and become a representative or, alternatively, I could commit myself to reforming the party through the organisational wing.  I ventured to suggest that I could probably have more impact over a decade or more by working to reform the organisational wing.

Louise thought this was an odd thing to say. Being a lawyer she instinctively thinks that all really good things are done in the open, in public, like in a court room. She couldn’t get her head around the proposition that seriously effective, impacting work can be done by fixing the organisational problems as opposed to making speeches in parliament. But as someone who had spent my entire professional career advising all manner of organisations how to do better, I had learnt that enormous impact comes from building and nurturing institutions, often behind the scenes.

Unhealthy organisations only last so long. Positive internal health in an organisation – a company, a partnership, an NGO, a start-up, a co-operative, a sports club and yes, a political party – enables its flag bearers to go out into the public and strut their stuff, to explain and advocate for their organisation and its goals. The strength of an organisation, always, always provides the platform for success in the public space.

In any event, I decided to go into parliament, thinking that I would leave it to others to reform the party. I could never have dreamed that two years into my first parliamentary term, things in the NSW Division would be such that my own pre-selection for the 2016 election would be seriously challenged despite an extremely strong supporter base across my electorate.

I survived, but I am not here to tell that story. It is important to highlight that I came into the parliament as an outsider. I was not involved in student politics. I had never worked as a staffer, or at a think tank. I was very fortunate, in 2012, to be preselected with broad based support, but that was largely because Hume was a rural seat with very traditional rural branches.

I had worked full time for around a year, with the support of Alby Schultz and Bill Heffernan, and I made contact with every branch member many times over. I took the view that I should work as though every member had a vote. As the result of a recent redistribution and a small group gaining a stranglehold at the northern end of Hume, an outsider like me would not be preselected again, no matter how much work he or she did.

The point is, the problems that I could see so clearly before I got into parliament have not been fixed, and have arguably got worse.

The (not) Cowra branch

To bring this to life, I propose to tell only one simple story from my own experience. This story highlights much of what anyone needs to know about the challenge we face. It is not the only example I could give, but it’s a simple story about a branch in my electorate, or more accurately about a branch that was not to be.

Branches are of course, or at least should be, a good thing for any member of parliament. They are a mainstay of our support in the community. Regular meetings enhance camaraderie between supporters and make members aware of what you their MP or candidate is doing. The branch members provide MPs with feedback.

Crucially, they also go out into the communities and barrack for you. In essence, a properly functioning branch plugs its representative into the local community, and without doubt makes a very material difference on the ground. For parliamentarians and candidates, it should be that the more branches and the more members, the better.

When I set out on my quest for pre-selection in (the old) Hume, I found that the branch structure in some parts of the electorate was weaker than they should have been. So I consciously and actively built support across the electorate. During this time, I identified a handful of communities where branches would be beneficial and realisable – in large part because people asked me about joining the party.

I had many conversations, ascertained there were requisite numbers to form a branch, and I had a sense of who would be the main players in each branch and encouraged them to enlist others. I was also aware that opening a branch was not straight forward in NSW. Having the willing supporters signed up and ready to go does not mean a branch can be opened. Senior players in the party then and now, can often find a way to directly or indirectly veto the opening of new branches.

To maximise chances of success, and to avoid disappointment, I decided to kick off in Cowra.  Why Cowra? Well, Cowra was the furthest distance from Sydney where our internal battles can be brutal. It was my assessment that a far flung Cowra branch would pose less concern to the good and the great of the party – whatever the concerns might be – and therefore had the best prospects of succeeding.

It had also recently been a National Party stronghold, and it needed a Liberal presence. The idea was to get Cowra opened, and then the others could follow. I knew that if the Cowra branch could not get off the ground, then others would likely be far more difficult.

For arcane reasons, I needed to obtain approval from the State Executive to move recently signed up members living in and around Cowra into a new branch. It was to be full of classic country Liberals: tradies, small business owners, farmers, retirees, some former Nationals (!), country doctors, solicitors. There could not be a group of people who looked more like country Liberals. And none of them would have known a power broker if they had fallen over one.

You are all guessing by now where this story ends. The application was rejected by the State Executive. Informally, I was told that there was a “concern” amongst the State Executive that the branch would be stacked with factional operators.

This may well have been a genuinely held concern for those on the State Executive who voted no. But there was in fact zero prospect of that. Cowra is a long way from anywhere, and if powerbrokers had shown interest in joining the Cowra branch, the metaphorical shotguns would have come out. Those country Liberals would simply not have tolerated it.

This was a turning point for me. At that point I switched to being a polite, private supporter of party reform to committing myself to bringing it about. I had wasted valuable time and effort in trying to get the branch established. Worse, the rejection of the application was embarrassing for me among those supporters and, in my view, embarrassing for the party.

Former National Party members – who were now my supporters – were astounded by all of this. If I, a hard working local member, a new member of the federal parliament, who had come into parliament to do good work for the people of Hume and the country, who had no interest in shenanigans of any kind, had no clear capacity to build my local support base by forming genuine, properly functioning branches full of good country Liberas… then something was rotten in the State of Denmark.

It was and is an untenable situation. As it stands, I have people – dinky-di real people – in different places wanting to join the party. Some are prevented from joining existing nearby branches which do not accept any new members. Others would like to start up new branches to get around the rejection for their membership applications. But for various reasons it is just too hard to get the branches up and running.

It has also been true that the State Executive did, in recent years, approve the opening of what are known as paper branches. These branches are controlled by powerbrokers, whose members rarely attend meetings, but they create voting delegates whose votes can be controlled.

The control over who can and cannot open branches, with many branches then being tightly controlled and managed, provides a line of command and control from the State Executive right through the organisational party. There is a sense amongst the ordinary membership that their concerns are a second order priority in this extremely centralised hierarchy.

It is important to acknowledge some counterpoints. First, none of these concerns are completely new, even if the urgency of the need for change has intensified. And no so called “faction” has clean hands. You don’t need to be a student of Shakespeare or a House of Cards fan to know that most human beings tend towards self-interest, particularly when faced with the question of acquiring and preserving power.

Second, I don’t suggest for a second that any person on the State Executive is wrongly motivated. In organisations where the incentives for advancement are dysfunctional, skewed narratives develop. The narratives are honestly held but they justify conduct that is not in the best interests of the organisation.

A wise outsider can immediately see how patently wrong the narrative is, but it is strongly asserted and protected by incumbents because it is what they are used to. I have seen this many times in so many organisations, public and private. I have no doubt that many of those who are against party reform quite honestly hold the view that we are doomed if reform occurs.

But in my respectful opinion they are wrong.

Why do we need reform?

Whether you agree with party reform or not, I don’t think anyone can seriously contest the proposition that the effect of all this is discourage some good Liberal supporters from joining the party. No one can seriously argue that current settings strongly encourage recruitment of good liberals and the formation of new, bona fide branches. And those settings encourage purely political behaviour with no flow on benefits for electoral success or good policy.

Now it doesn’t really matter why this is happening. Or who started it. There is no point in blaming one group or another. It just needs to change. The size and energy of our membership base has depleted and we are not replenishing it. Many of our members and supporters are getting cynical and fed up. Quite simply, we are not putting our best foot forward.

So what needs to be done?

The answer to these problems is not new and many have suggested solutions. I am firmly and unapologetically in the camp that thinks the starting point is to allow all party members who genuinely reside in an electorate to vote in pre-selections in that electorate.

It is an important step to shifting power and energy back to the grass roots. The more members we have and the more members have voting rights on important questions, the harder it will be for anyone to control outcomes. It will be a virtuous circle.

Many whose views and long experience count – whether it be the premier, former prime ministers Howard and Abbott, Senator Sinodinos and many, many others, (including many in this room) – have indicated their agreement with this.  So this is hardly genius. Calling for a bit of democracy in a mainstream political party in one of the world’s great democracies is not a radical idea. It is not exactly an affront to our political instincts!

What’s more, the de-centralisation of power is central to liberal and conservative philosophy. It is one of the ways we like to distinguish ourselves from our centralising, left wing opponents. In our party, efforts to move power from the centre to the membership should be embraced as obvious, fundamental and axiomatic.

Nor is it new. It’s not as if we would be embarking on a scary bold experiment where the consequences are unknown. The reforms that we are all calling for have occurred elsewhere in Australia and in conservative parties around the world, including the UK and Canada.

Look at our neighbours in Victoria. The implementation of plebiscites in that Division has not resulted in conferences being overtaken by particular groups, by religious extremists or ethnic clans. Victoria has produced two outstanding groups of new parliamentarians based on plebiscites, including Josh Frydenberg, Kelly O’Dwyer, Alan Tudge, Dan Tehan, Julia Banks, Tim Wilson and James Patterson. No one can argue with the quality of those outcomes.

We should also take a good look at our coalition partner, the Nationals which has been far more democratic for some time. This has given it an enormous advantage in regional and rural areas. Despite facing the demographic challenges of older and disengaged populations in many of their seats, their membership base is surprisingly energetic and robust. That is directly attributable to their much flatter, more democratic party structure which gives members a vital say in the goings on in the party, including pre-selections.

We should not fear change

Addressing another counterpoint: it’s true, serious change in any organisation is never plain sailing. Not everything goes according to plan. There will be some pain and some people will be worse off.  And, I am the first to acknowledge that the current system in NSW has produced some outstanding MPs.

There is already serious talent within our ranks. But talented hard working MPs in NSW should not be concerned about a stronger membership. They have nothing to fear because history shows that plebiscites clearly reward talent and merit, and strongly favour incumbency.

Why now? What is new?

So why do we need to act with urgency? Well, the frank answer is the electoral cycle. In a couple of years at both State and Federal level we are heading into elections for third terms. Our stocks are not what they were when first elected. We cannot wait for a couple of plebiscite pilots in two or three seats prior to the next elections, as is the current plan.

Nor is it enough for a few senior politicians in safe seats to volunteer plebiscites in their seats, worthy as the gestures are. It simply won’t cut the mustard. We need to lower the draw bridge and show the Australian people we have as much faith in their involvement in the party, as we do their involvement in the ballot box. We need genuine plebiscites in the short to medium term in all seats, but prior to the next elections as a minimum we need plebiscites to elect candidates in all marginal seats.

We need time to build up our membership base in these seats, get candidates on the ground, working in their communities with their supporters working hard for their victory. Beyond that we need to move to entrench plebiscites in all seats.

Brexit, goats cheese and cheddar cheese

There’s another reason – perhaps a more important reason – that the time has come to get going immediately. Let me cut to the chase.

At the federal election, we lost seats in NSW that were vulnerable to dynamics we are now seeing in the UK , through Brexit and the US via Trump. It is clear that in Australia and throughout the Western world there is increasing cynicism against the political class and politicians generally. The representatives of major parties in all Western democracies personify the political class.

The perception is that we are the establishment, the elite. We are perceived as self-serving and arrogant. We are seen as people who make promises and don’t deliver. We don’t share in the frustrations of ordinary people. Now we all know that the caricature is untrue and even unfair at many levels.

Much extraordinarily good work is ignored. But the cynicism is perpetuated by the media, minor parties and independents who have an interest in undermining the success of the major parties. If we are honest though, we have to accept some of the blame.

The cynicism is stronger, much stronger, in the outer suburban areas and regional centres. Some of these voters feel that they have not been sharing in the extraordinary wealth generated in the knowledge economies right around the world.  Their homes are not increasing in value as much as those in the inner suburbs, whilst younger people are struggling to get into the housing market at all. In many areas, like the fringes of south western Sydney, which I represent, many feel like that they are battling all the time.

As they chase higher paid jobs closer to the city, they feel they spend their lives commuting. If they own small businesses, they feel like they are constantly dealing with red tape imposed by governments. Some are resentful, not because they are poor, but because they just can’t get ahead.

Contrast that with what demographer John Black refers to as “goats cheese” suburbs. These suburbs are closer to the CBDs and full of people who have done well out of the knowledge economy and who stand to do well in the future. Here in Sydney, many of the goats cheese suburbs are the richest suburbs in the country. The voters’ homes are worth small fortunes. If they don’t own homes, they are in rental accommodation close to the city because they are high end professionals and can afford it.

The new divide is not so much between haves and have nots, but between insiders and the outsiders. That divide separates the goats cheese and cheddar cheese communities, and is relatively new. It is gaining traction here and right around the Western world.

After the election, being vitally interested in the outer suburbs and regional cities, I ran a little analysis. I found that the swings against Liberal seats with high numbers of CBD workers – think Wentworth, Mackellar, North Sydney and Bradfield – were small when compared with seats with few CBD workers.

John Black has captured this beautifully. He found that the swing against the coalition in the wealthier, better educated goats cheese suburbs was only 1 per cent. In contrast, the swing against the coalition in suburbs for middle income families with higher numbers of swinging voters was around 6 per cent. Likewise for the regions where manufacturing and is in decline, characterised by lower income “working families” (his words not mine).

Now it is pretty obvious these results present a problem for us in the current climate. In NSW the Liberal brand has suffered. We are now firmly in the insiders’ club. Whether it is right or wrong, fair or unfair, is beside the point. The narrative is strong and plays right into this feeling that politics is all about us, not them.

Consequences for party reform

What does this have to do with party reform? Well I hope it is obvious. There has never been a time when mainstream political parties have been perceived to be more out of touch. And if we are to survive now and in the future, we need to address it.

Labor has foot soldiers and they know how to mobilise them. They are much better grass roots campaigners. They enlist the union members, teachers, nurses. They have more people doorknocking, phone canvassing and putting up corflutes. They perpetuate ugly lies in any way they can, including through third parties like Getup. They have had huge success with their grass roots campaigns in Queensland, Victoria,

In the last federal election, whilst we did win, a point that has been lost on many in Labor, it was not by much. Anyone who stood on a booth in Western and South Western Sydney on election day felt the pain, and it is a pain few of us will forget.

I’m not suggest that democratisation is a panacea.  We won’t wake up and find that electoral success is guaranteed. Much more is required. We do need to look at how to prevent dishonest phone canvassing and text messages.

We do need to address unprecedented queues at polling booths, providing endless opportunities for Labor booth workers to perpetuate their lies.  We do need to develop and deliver on policies that will open up new opportunities for all Australians.

We clearly need to build tougher, more assertive campaign machines in each electorate. We simply cannot go to the next Federal and State elections in NSW without a much more engaged membership than we currently have. We have no choice but to embrace democratisation as a catalyst for that renewed engagement.

Conclusion

Organisations are made up of human beings, and human beings, when drawn together in a common cause, rarely agree on how to define the cause, let alone how to execute it. But the best organisations constantly look for ways to iron out the wrinkles of dysfunction, to operate at their best.

The task is perpetual. Leaders must be vigilant, must keep the objectives and goals of the organisation firmly in sight, must be open to criticism, and prepared to address weaknesses. There must always be preparedness to change.

When things are broken, they must be fixed. As a broad church, and as a mainstream party it is inevitable and in fact healthy that we debate policies and their execution. However, we must surely all agree on our collective political imperative – to hold on to government so that our broader values can continue to advance this nation’s prosperity and security.

If we are committed to that objective, here and around the nation, we have a responsibility to address the democracy deficit in NSW, and address it now.